iprofile TM International Equity Class

Transcription

1 Annual Management Report of Fund Performance FOR THE PERIOD ENDED MARCH 31, 2018 CAUTION REGARDING FORWARD-LOOKING STATEMENTS This report may contain forward-looking statements about the Fund, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as expects, anticipates, intends, plans, believes, estimates or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements whether as a result of new information, future events or otherwise, prior to the release of the next Management Report of Fund Performance. CAUTION REGARDING FUTURE PERFORMANCE Sales commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the Fund s offering documents before investing. The indicated rates of return are the historical annual compounded total returns including changes in security value and reinvestment of all dividends (except for fee rebates) and do not take into account sales, redemption, distribution or optional charges, advisory fees payable directly by securityholders in certain series, or income taxes payable by any investor that would have reduced returns. Mutual funds are not guaranteed. Their values change frequently and past performance may not be repeated. Investors Group Corporate Class Inc. has separate classes of securities and separate series of each class. Each class of securities represents a separate investment fund which has a separate portfolio of investments. The following report is for the above-named fund, which is one such class of Investors Group Corporate Class Inc. This annual Management Report of Fund Performance contains financial highlights, but does not contain the complete audited annual financial statements of the investment fund. If the audited annual financial statements of your investment fund did not accompany the mailing of this report, you may receive a copy of them, at your request, and at no cost, by calling ( if you live in Québec) or by writing to us at 447 Portage Avenue, Winnipeg, Manitoba, R3B 3H5 (2001, boulevard Robert-Bourassa, bureau 2000, Montréal (Québec), H3A 2A6 if you live in Québec), or by visiting our website at or SEDAR at Securityholders may also use one of these methods to request a copy of the investment fund s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure. Every effort has been made to ensure that the information contained in this Report is accurate as of March 31, 2018 (except when stated otherwise), however, the Fund cannot guarantee the accuracy or the completeness of this material. Please refer to the Fund s Prospectus and audited annual financial statements for more information. References to Consultant or Consultants mean Representative or Representatives in Québec. For current net asset values per security for the Fund and for more recent information on general market events, please visit our website at Copyright Investors Group Inc Trademarks, including Investors Group, are owned by IGM Financial Inc. and licensed to its subsidiary corporations.

2 Management Discussion of Fund Performance This management discussion of Fund performance presents views of the portfolio management team about the significant factors and developments during the past year that have affected the Fund s performance and outlook. Please read the Caution Regarding Forward-looking Statements located on the first page of this document. Investment Objective and Strategies The Fund aims to provide long-term capital growth through exposure to international equity securities, excluding North American equities and equities from emerging markets. The Fund aims to achieve this objective by investing primarily in units of other mutual fund(s) and/or directly in equity securities. To achieve its investment objective, the Fund intends to invest in units of the iprofile International Equity Pool (the Underlying Fund) or any successor mutual fund(s). The Underlying Fund aims to provide long-term capital growth by investing primarily in international equities, excluding North American equities and equities from emerging markets. The strategies below relate to the Underlying Fund. To achieve the Underlying Fund s investment objective, investments in the Underlying Fund are, in accordance with the iprofile model, allocated by the portfolio management team to specific mandates, each of which is separately managed by a sub-advisor having a complementary management style. The mandates for the Underlying Fund are: INTERNATIONAL LARGE CAP VALUE MANDATE (50% WEIGHTING) Until April 18, 2018, The sub-advisor was Lazard Asset Management LLC. The sub-advisor invested primarily in a diversified selection of valueoriented, large-capitalization equity securities from Europe, Australia, Asia and the Far East. Effective April 19, 2018, The sub-advisor is BlackRock Asset Management Canada Limited. The sub-advisor invests primarily in a diversified selection of largecapitalization equity securities from Europe, Australia, Asia and the Far East. In selecting securities for the strategy the sub-advisor considers favorable valuation and other fundamental metrics along with market sentiment and macro views. INTERNATIONAL LARGE CAP GROWTH MANDATE (50% WEIGHTING) The sub-advisor is JPMorgan Asset Management (Canada) Inc. The sub-advisor invests primarily in a diversified selection of growthoriented, large-cap equity securities from Europe, Australia, Asia and the Far East. Risk The overall level of risk of investing in the Fund remains as discussed in the Prospectus, and is not expected to have significantly increased or decreased as a result of operations during the period. Accordingly, the Fund also remains suitable for the same investors as discussed in the Prospectus. Results of Operations CHANGES IN NET ASSETS The Fund s net assets increased by 78.8% during the period to $254.8 million. This change was comprised primarily of gains from operations of $21.3 million and an increase of $91.0 million due to net securityholder activity. This level of securityholder activity relative to net assets is significant, but the Manager does not believe that net securityholder activity had a material impact on the Fund s performance. FEES AND EXPENSES The management expense ratios (MERs) for all series are generally similar to the MERs for the 12-month period ended March 31, Total expenses paid vary period to period mainly as a result of changes in average assets in each series. Average net assets of the Fund for the period were $199.9 million, an increase of over 115% compared to the period ended March 31, INVESTMENT PERFORMANCE In accordance with National Instrument , the following comparison to a broad-based index has been included to help you understand the Fund s performance relative to the general performance of the markets. However, the portfolio management team cautions that the Fund s mandate may be different from the index shown. For a description of the index, see Annual Compound Returns. Also, it is important to note that investors cannot invest in an index. Indirect investments in an index are available; however, there are fees and transaction costs and other variables that will impact returns when investing in these products. Index returns included in the comparison below do not reflect these costs and variables. In addition, unlike the index, this Fund may be subject to valuation adjustments as outlined in the Fund s valuation policies as it relates to non-north American equities held either directly or indirectly by the Fund. A fair value adjustment can either positively or negatively impact the Fund s rate of return. For the returns of all series and for longer-term performance of the Fund, see the Past Performance section of this report. Performance will vary by series primarily because fees and expenses may differ between series, or because securities of a series were not issued and outstanding for the entire reporting period. See Series Information for the annual expense rates for each series. For the year ended March 31, 2018, the Series I securities returned 12.3% (after deducting fees and expenses paid by the Pool). In comparison, the MSCI EAFE Index Total Return (Net) $ CAD returned 11.2%. The MSCI EAFE Index Total Return (Net) $ CAD delivered solid returns over the period. Asia Pacific equities posted the strongest gains, driven by ongoing global economic expansion, especially in China. Japan, which experienced its best economic performance in years, saw stock gains boosted by continued stimulative monetary policy, although the advance was held back somewhat by a strengthening currency. The eurozone economy maintained its best growth rates in more than a decade, fuelling strong corporate earnings growth. Solid returns from European stocks for Canadian investors were driven primarily by currency movements. As at March 31, 2018, substantially all the net assets of the Fund were invested in iprofile International Equity Fund (the Underlying Fund). The Underlying Fund s large-capitalization, value-oriented and growthoriented investments outperformed the index. In both cases, stock selection in the financials and industrials sectors contributed positively to relative performance. Stock selection in the health care and consumer staples sectors detracted from relative performance. From a country perspective, stock selection in Japan and an underweight position relative to the index in the underperforming Australian market contributed positively to the relative performance of both value-oriented and growth-oriented investments. Stock selection in the United Kingdom and Denmark detracted from the relative performance of value-oriented investments. Stock selection in the U.K. and Switzerland detracted from the relative performance of growth-oriented investments.

3 Recent Developments (BASED ON INFORMATION AS AT APRIL 20, 2018) The Underlying Fund s portfolio management team believes the outlook for global equity markets remains largely positive, despite increasing volatility and recent all-time highs in many markets. The synchronized global economic recovery and strong earnings growth should continue during the rest of Meanwhile, the risk of an imminent economic recession appears low. The outlook for large-capitalization, value-oriented investments is relatively neutral. There has recently been some deterioration in European economic indicators, which has resulted in the portfolio management team s preference for investments in Sweden and Switzerland over the U.K. and the rest of the eurozone. Sector positioning has become more defensive. This portion of the Underlying Fund is overweight relative to the index in the information technology sector and is underweight in interest-rate sensitive sectors, including financials, as a result of recent rate volatility. The portfolio management team feels the depth and breadth of the current global expansion, which is prompting increasing expectations of gross domestic product acceleration, should be positive for the Underlying Fund s growth-oriented investments. Corporate and consumer sentiment remain healthy and confidence in corporate earnings is high. Current valuations for growth-oriented stocks outside the U.S. appear reasonable. Although the U.S. economy is strong, the portfolio management team believes it could be in danger of overheating as a result of increasing fiscal stimulus. This could create headwinds for growth stocks.

4 Related Party Transactions I.G. Investment Management, Ltd. is the Manager and Portfolio Advisor of the Fund. The Fund is offered through the Consultants of Investors Group Financial Services Inc. and Investors Group Securities Inc., together referred to as the Distributors. The Manager, Portfolio Advisor and Distributors are, indirectly, wholly owned subsidiaries of IGM Financial Inc. The following sub-advisors have been retained to provide investment services to the Underlying Fund: Lazard Asset Management LLC (until April 19, 2018) JPMorgan Asset Management (Canada) Inc. BlackRock Asset Management Canada Limited. (effective April 19, 2018) The Fund paid a class advisory fee to the Portfolio Advisor for investment management and portfolio advisory services (see Management Fees). The Fund also paid the Manager an administration fee for administrative services. See Series Information for the annual rates paid by each series (as a percent of average net assets) for these fees. The Fund invests substantially all of its assets in another Investors Group fund. Management Fees The Fund pays Investors Group a class advisory fee. The fee paid by each series is calculated as a percentage of the net asset value of the series as of the close of business on each business day (see Series Information for rates payable by each series). The class advisory fees were used to pay costs incurred in providing investment management services. Securityholders in the iprofile Program also pay a program advisory fee directly to Investors Group for distribution-related services. This fee is not included in the Fund s expenses.

5 Summary of Investment Portfolio AT MARCH 31, 2018 The largest positions of the Underlying Fund (up to 25) at the end of the period, and the major asset classes in which the Underlying Fund was invested, are indicated below in addition to direct positions, if any. This summary of investment portfolio may change due to ongoing portfolio transactions. The summary of investment portfolio will be updated as at the end of the next quarter. Please see the front page for information about how it can be obtained. The Management Report of Fund Performance, Prospectus, Financial Statements and other information for the Underlying Fund are available upon request, and at no cost, by using one of the methods located on the front of this document. Summary of Top 25 Long Positions % of net assets Cash and cash equivalents 4.1 Royal Dutch Shell PLC A 2.9 Prudential PLC 2.6 Novartis AG Reg. 2.4 SAP AG 2.3 Unilever PLC 2.3 British American Tobacco PLC 2.2 Ferguson PLC 1.9 Sumitomo Mitsui Financial Group Inc. 1.7 Makita Corp. 1.5 Don Quijote Holdings Co. Ltd. 1.5 DBS Group Holdings Ltd. 1.5 Safran SA 1.5 Daiwa House Industry Co. Ltd. 1.4 ASML Holding NV 1.3 Shin-Etsu Chemical Co. Ltd. 1.2 BHP Billiton PLC 1.2 AIA Group Ltd. 1.2 Wolters Kluwer NV 1.2 Shire PLC 1.2 Aon PLC 1.1 Vinci SA 1.0 Assa Abloy AB B 1.0 Medtronic PLC 1.0 Capgemini SE Summary of Composition of the Portfolio PORTFOLIO ALLOCATION % of net assets Equities 95.5 Cash and cash equivalents 4.1 Other net assets (liabilities) 0.4 Total REGIONAL ALLOCATION Europe ex U.K Japan 18.9 United Kingdom 16.1 Pacific ex Japan 8.3 United States 3.3 Latin America SECTOR ALLOCATION Financials 18.5 Industrials 17.9 Consumer Discretionary 14.2 Health Care 9.2 Consumer Staples 8.2 Information Technology 7.7 Materials 7.3 Energy 4.9 Telecommunication Services 4.3 Other Series Information AT MARCH 31, 2018 Inception Class advisory Service Administration Series date fee (%) fee (%) fee (%) Series I 03/01/ up to 0.30 Series Ti 03/01/ up to 0.30 The fee rates in the table above are rounded to two decimals. Inception dates of the series are shown if within 10 years. Summary of Top 25 Short Positions % of net assets n/a -

6 Past Performance It is important to remember that past performance doesn t necessarily indicate future performance. The returns presented below: assume that all dividends are reinvested into the Fund; do not include sales charges, income taxes, optional expenses or advisory fees payable directly by securityholders in certain series, that reduce returns; show performance based on Canadian dollar returns; and show performance for each of the past 10 financial years, or since the series started. Financial years are as follows: six months ended March to 2018 nths ended March 31 Inception dates of the series within these periods are shown in Series Information. Performance during these periods may have been impacted by the following events: During some performance measurement periods, certain fees or expenses may have been waived or absorbed by the Manager. There is no assurance that fees will be waived in the future. Year-by-Year Returns These bar charts show how much an investment in securities made on the first day of each financial year would have increased or decreased by the end of the respective period. For the first year of a series, the percentage shown will be the actual return of the series from its inception date. The charts illustrate how the Fund s performance has changed over time. SERIES I SERIES Ti % (0.6) (6.2) mo % (0.6) (6.2) mo. Annual Compound Returns The following table compares the historical annual compound returns for each series with the index (or indices) shown below, for the periods shown ending March 31, For a discussion of the Fund s recent performance relative to the index (or indices), see Results of Operations. Since (%) 1 yr 3 yrs 5 yrs 10 yrs inception Series I n/a 10.0 Series Ti n/a 9.9 MSCI EAFE Index Total Return (Net) $ CAD n/a The annual compound return for the index presented in the table corresponds to the inception dates for Series I and Ti. The MSCI EAFE Index Total Return (Net) $ CAD is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets excluding the United States and Canada.

7 Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the past five financial years. Footnotes are presented after Ratios and Supplemental Data. Net Assets per Security 1 SERIES I (in $) Net assets, beginning of period Increase (decrease) from operations: Total revenue Total expenses (0.09) (0.08) (0.09) (0.08) (0.07) Realized gains (losses) for the period 0.01 (0.01) Unrealized gains (losses) for the period (1.29) Total increase (decrease) from operations (0.89) Dividends: Ordinary (0.35) (0.39) Capital gains Return of capital Total annual dividends (0.35) (0.39) Net assets at period end SERIES Ti TI (in $) Net assets, beginning of period Increase (decrease) from operations: Total revenue Total expenses (0.07) (0.07) (0.07) (0.07) (0.07) Realized gains (losses) for the period 0.01 (0.01) Unrealized gains (losses) for the period (1.04) Total increase (decrease) from operations (0.72) Dividends: Ordinary (0.24) (0.30) Capital gains Return of capital (0.74) (0.78) (0.86) (0.90) (0.83) 4 Total annual dividends (0.98) (1.08) (0.86) (0.90) (0.83) Net assets at period end

8 Ratios and Supplemental Data SERIES I Total net asset value ($000 s) 241, ,300 63,235 42,492 23,511 Number of securities outstanding (000 s) 15,711 9,613 4,798 3,024 1,865 5 Management expense ratio (%) Management expense ratio before waivers or absorptions (%) Trading expense ratio (%) Portfolio turnover rate (%) SERIES Ti TI Total net asset value ($000 s) 13,780 8,256 5,235 4,279 1,854 Number of securities outstanding (000 s) 1, Management expense ratio (%) Management expense ratio before waivers or absorptions (%) Trading expense ratio (%) Portfolio turnover rate (%) These calculations are prescribed by securities regulations and are not intended to be a reconciliation between opening and closing net assets per security. This information is derived from the Fund s audited annual financial statements presented in accordance with IFRS. Net asset values presented are consistent with the net asset values calculated in accordance with securities regulations for the purchase and redemption of the Fund s securities (pricing net asset values) and as such, pricing net asset values are not separately disclosed. 2 Commissions and other portfolio transaction costs are included in total expenses. 3 Net asset value and dividends are based on the actual number of securities outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number of securities outstanding over the financial period. In the period a series is established, the financial information is provided from the date of inception to the end of the period. 4 Dividends were paid in cash, reinvested in additional securities of the Fund, or both. 5 Management expense ratio (MER) is based on total expenses, excluding commissions and other portfolio transaction costs, income taxes, and withholding taxes, for the stated period and is expressed as an annualized percentage of daily average net assets during the period, except as noted. In the period a series is established, the MER is annualized from the date of inception to the end of the period. Where a Fund directly or indirectly via derivative contract invests in securities of an Underlying Fund, the MERs presented for the Fund include the portion of MERs of the Underlying Fund attributable to this investment. Correspondingly, the MERs presented for the Fund exclude any management or other fees that are waived as a result of its investment in the Underlying Fund. Certain expenses that are non-recurring and/or otherwise uncertain as to their future timing and amount have not been annualized. 6 The trading expense ratio (TER) represents total commissions and other portfolio transaction costs incurred as an annualized percentage of daily average net assets during the period. Where a Fund invests in securities of an Underlying Fund, the TERs presented for the Fund include the portion of TERs of the Underlying Fund(s) attributable to this investment. 7 The Fund s portfolio turnover rate indicates how actively the Fund s Portfolio Advisor manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the period. Generally, the higher a Fund s portfolio turnover rate in a period, the greater the trading costs payable by it in the period, and the greater the chance of an investor receiving taxable capital gains in the period. There is not necessarily a relationship between a high turnover rate and the performance of a Fund. Transactions incurred to realign the Fund s portfolio after a fund merger, if any, are excluded from the portfolio turnover rate.